EU opens state-aid probe into Romania energy contracts

(BUCHAREST) - The European Commission said Wednesday it had launched a probe into preferential power tariffs granted by Romania's Hidroelectrica to several firms in breach of state-aid rules.

"The European Commission has opened five distinct in-depth investigations to assess whether the Romanian state-controlled hydropower producer Hidroelectrica purchased or sold electricity at preferential tariffs to several electricity traders, industrial clients and electricity producers," a statement read.

"Indirect subsidies that reduce the normal operating costs of companies can be just as distortive of competition as outright grants.

"We have to check whether the preferential tariffs granted by Hidroelectrica put the clients that benefitted from them on a better footing than their competitors in the internal market," Commission vice-president in charge of competition policy Joaquin Almunia said.

Romania's competition watchdog said it had assisted the EU in the preliminary procedures.

The investigation targets among others two bilateral contracts concluded in December 2009 and December 2010 by Hidroelectrica with steel producer ArcelorMittal, each for the supply of 1.75 TWh of electricity per year, "at prices which seem to be below market levels."

ArcelorMittal denied having received any state aid from Hidroelectrica and promised to collaborate with the EU during the investigation, a press release quoted by Mediafax news agency said.